How To Invest Lesson 1: What is Stock Investing?

In this lesson, you will learn:

- What are stocks and why they matter
- Why people invest in stocks
- What terms like ’Bid Price’ and ’Market Volume’ actually mean

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Transcript

1. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. In this WealthLift video lesson, you will learn: • What are stocks and why do they matter? • Why do people invest in stocks? • What do terms like ’Bid Price' and 'Market Volume' actually mean? Lesson 1: What is Stock Investing?
2. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 1: What are stocks? Stocks are traded on a stock exchange, such as the New York Stock Exchange (NYSE) or the NASDAQ. A stock or share represents ownership in a piece of a company. The stock price of a company is the current market price of a single stock in that company.
3. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 1: What are stocks? Buyers put in a bid price, or the price at which they are willing to buy a stock for. Sellers put in an ask price, or the price at which they are willing to sell a stock for.
4. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 1: What are some of the key terms? Market Capitalization = Current Stock Price x No. of Outstanding Shares The number of stocks of a single company being traded over any period of time is known as its market volume. The market capitalization of a company is its total value, as determined by the stock market.
5. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 1: What are some of the key terms?
6. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 1: Why do people invest in stocks? Companies generate earnings, or profits generated from providing goods and services. Stocks can appreciate in price, creating capital gains, or an increase in the value of your assets, which grow your wealth. Shareholders in companies are compensated for their risk through a risk premium.
7. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 1: Why do people invest in stocks? $10,000 invested from 1964 to 2010: Stocks, Bonds, Savings, Gold Stocks: $714,925 Gold: $405,057 Bonds: $220,619 Savings: $172,537 [1]Historical Stock, Treasury bond data: Federal Reserve of St. Louis [2]Historical Gold price data: Kitco.com historical gold charts [3]Historical 6-month CD Savings rate data: Federal Reserve Historical 6-month CD interest rates
8. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. In the next WealthLift video lesson, you will learn: • What is an investing style and why do I need one? • How much should I invest in the stock market? • Why should I invest in different sized companies? • What sort of companies should I invest in? Congratulations – Lesson 1 Completed